KSB Group publishes preliminary results for 2020
- KSB very satisfied with performance in a year over-shadowed by the coronavirus pandemic
- EBIT improved significantly in the second half of the year
- Further improvement in net financial position
The coronavirus pandemic materially affected the business performance of Frankenthal-based pump and valve manufacturer KSB in the 2020 financial year. The preliminary figures for order intake, sales revenue and EBIT were thus down on the strong prior-year figures. Encouragingly, the positive trend seen since mid-year continued in the 4th quarter, providing a significant boost to sales revenue and EBIT in the second half of the year compared with the first six months. In view of prevailing global economic conditions, the company is very satisfied with business performance overall.
In the 2020 financial year, KSB generated order intake of € 2,143 million (– 12.6 %). The decrease of € 310 million is due, in particular, to the impact of the coronavirus pandemic and negative currency translation effects amounting to € 82 million. Sales revenue dropped by € 175 million (– 7.3 %) to € 2,208 million (previous year: € 2,383 million). EBIT was likewise down owing to the lower sales revenue volume. However, thanks to the timely rollout of targeted savings measures and higher sales revenue posted in the second half of the year, earnings improved markedly on the first two quarters. KSB expects EBIT to range between € 67 million and € 71 million (previous year: € 113.6 million). This already includes special factors such as impairment losses on goodwill in the preliminary amount of € 11 million.
The increase in earnings combined with stringent working capital management bolstered the net financial position by € 59 million year on year to € 305 million.
The decline in order intake had the greatest impact in percentage terms in the Regions Middle East / Africa / Russia, Americas and Asia / Asia Pacific. In China, the downturn in the first half of the year was almost completely compensated for in the last six months of the year. Europe, the Region with the highest sales revenue, saw order intake fall by 9.7 %.
The three segments Pumps, Valves and Service were affected by the decline in almost equal measure.
Sales revenue in the Pumps segment was the least hard hit at – 6.0 %, propped up by a solid level of orders on hand and long-term projects. In the Valves segment, the decrease was 7.9 %; in the Service segment, it was 11.4 %. The drop in sales revenue in the Service segment was attributable to a € 38 million reduction resulting from the sale of French service companies over the course of 2020 as well as to the deferral of service orders as a result of the pandemic.
“Overall, we are very satisfied with the financial year just ended, thanks to a good level of orders on hand, a very good second half of the year and our timely introduction of measures to reduce costs. Our international production network meant that we were able to meet our delivery obligations at all times, while also allowing us to compensate for the temporary shutdown of individual locations and cushion the decline. Even though order intake was down in the past financial year, we have a solid order book and anticipate that we will be able to improve our earnings significantly in the current 2021 financial year. Nevertheless, we will keep a close eye on the repercussions of the pandemic and remain disciplined in our cost reduction measures to further underpin our earnings capacity. We additionally expect positive effects from the new organisational structure implemented last year, as a result of which we have a much stronger market focus,” said Dr Stephan Timmermann, CEO.